With innovation investments increasing, it's critical to invest in future potential and have a balanced innovation portfolio management strategy. Learn more.

1. Provocativethinking, transformativeinsights, tangibleoutcomes
GOVERNING
INNOVATION
The recipe for portfolio growth

2. Our research reveals that
innovation investments and
application across portfolios are
increasing
Companies are
expanding innovation
spend and spread
Investments in innovation
are expected to increase
1.8x
in the next 5 years.
Companies are embracing
both incremental and
non-incremental
innovation across their
entire portfolio of
businesses.

3. To assess how companies apply innovation across their
businesses we leveraged the Portfolio Innovation Model
Portfolio Innovation
Apply incremental and non-
incremental (breakthrough and
disruptive) innovation across
businesses of all maturity levels
(legacy, growth and emerging)
INCREMENTAL
INNOVATION
Enables small
improvements or
extensions to
existing offerings
BREAKTHROUGH
INNOVATION
Enables new
product or service
variations, using a
new technology
DISRUPTIVE
INNOVATION
Enables an
entirely new
offering to
address an unmet
need
EMERGING BUSINESSES
The most nascent ventures; new
business models, yet to be scaled
GROWTH BUSINESSES
Experiences strong market demand;
based on differentiated offerings
LEGACY BUSINESSES
The oldest, most mature, businesses;
provide steady cashflows
BUSINESS
MATURITY LEVELS
INNOVATION TYPES

4. Companies tend to
innovate for longevity
or for balance
The vast majority of companies
manage innovation according to the
shape of today’s business
of companies innovate for longevity
today, dedicating the lion’s share of
innovation investments to their legacy
businesses.
of companies innovate for balance today:
most of their innovation investments flow
to their growth and emerging businesses.
26%
74%

5. What is the shape of your portfolio today?
62%
24%
14%
MATURE PORTFOLIO
Companies that generate 50% or more of
their revenues from legacy businesses today
37%
38%
25%
INVESTMENT STRATEGY:
BALANCE
Majority of innovation investments
flow to growth and emerging
businesses
Note: Total Sample N=1,090.
Mature portfolio companies N=802 (74% of
the total). Balanced portfolio companies
N=288 (26% of the total).
Percentages represent average revenue
generated for each portfolio business for
each cluster. The median value shows a
similar distribution.
Source: Accenture Portfolio Innovation
Survey, 2019
Emerging businesses
Growth businesses
Legacy businesses
INVESTMENT STRATEGY:
LONGEVITY
Majority of innovation investments flow
to legacy businesses
BALANCED PORTFOLIO
Companies that generate more than 50% of
their revenues from growth and emerging
businesses today
Two portfolio models, two investment strategies

6. 42%
34%
23%
20%
Intensify non-incremental
innovation
Intensify incremental
innovation
Intensify both non-incremental
and incremental innovation
Business as usual
Percentage of
companies expecting
double digit growth in
their legacy businesses
Knowing where to intensify innovation is key
Note: Mature portfolio companies are those that generate >=50% of total revenue from their legacy businesses.
Sample N = 802. Double digit growth is >=10% CAGR in the next 5 years.
Source: Accenture Portfolio Innovation Survey, 2019
Expected impact of innovation type on future growth in the legacy business
~2X
For mature portfolio companies, non-incremental innovation in
legacy business holds the biggest growth promise
50%
40%
30%
20%
10%
0%

7. 13%
9%
30%
7%
Intensify non-incremental
innovation
Intensify incremental
innovation
Intensify both non-incremental
and incremental innovation
Business as usual
Percentage of
companies expecting
double digit growth in
their newer businesses
Innovating for balance calls for a more pervasive approach
Double digit growth in newer businesses requires intensive adoption of
a broad set of innovations for balanced portfolio companies
Note: Balanced portfolio companies are those that generate <50% of total revenue from their legacy businesses.
Sample N = 288. Double digit growth is >=10% CAGR in the next 5 years.
Source: Accenture Portfolio Innovation Survey, 2019
Expected impact of innovation type on future growth in the newer businesses
2.3X
50%
40%
30%
20%
10%
0%

8. We examined how
innovation is and
will be governed
84%
of companies say that
they are taking a more
centralized approach to
directing innovation.
Most companies know that
their innovation investments
must be managed
proactively….
… yet most companies
govern innovation
haphazardly today.
Our hypothesis: the more
widespread innovation
becomes, the stronger
governance it will need
Only 12%
of companies govern
innovation extensively
today.

9. 12 Governance rituals enable innovation
Our research found that companies are better able to turn innovation
investments into growth when they follow these 12 governance rituals.
1. Put innovation at the
center of corporate
strategy
2. Actively communicate
innovation agenda to
employees and investor
community
3. Actively build a culture
of innovation
4. Everyone generates
ideas to improve
existing offerings
5. A diverse team of
experts generates ideas
for brand new offerings
6. Identify disruptive ideas
with the help of tech
partners
7. Experimentation
investments are made as
part of budgeting
lifecycle
8. Experimentation
investments are funded
gradually
9. Experiments are
conducted by an
innovation lab/digital
factory
10.Scale with technology
partners
11. Scale with talent
partners
12.Scale through an
innovation lab/digital
factory
Inspiration Ideation Experimentation Scaling

10. 80
90
100
110
120
130
140
150
160
170
180
190
200
2013 2014 2015 2016 2017 2018 2019e 2020e 2021e 2022e 2023e
Revenue growth and commitment to innovation governance
Revenue Trajectory (Past: 2013-2018 and Future: 2019 to 2023 Estimated); (2013 = 100)***
Sample: N= 881
Note: * Extensive innovation governance: adoption of 6-12 rituals (133 companies remain in this group in the future). ** Selective innovation governance: adoption of <6
rituals (206 companies remain in this group in the future). 748 companies expect to switch from selective to extensive innovation governance in the future. *** Normalized
revenues for 2013-2018 were obtained by first adding the revenues of all companies in the respective cluster, and then equating the sum for 2013 to 100. Future revenue
CAGR was estimated using projected overall revenue growth rates between 2019-2023.
Sources: Accenture Portfolio Innovation Survey, 2019, Capital IQ, Accenture Research Analysis
5.9%
CAGR
Revenue trajectory of
companies adopting
*extensive innovation
governance (past and
future)
Revenue trajectory of
companies switching from
**selectiveinnovation
governance (past) to
*extensive innovation
governance (future)
7.2%
CAGR
RevenueTrajectory
6.5%
CAGR
100 2.9%
CAGR
More is more
Companies that govern innovation extensively delivered 2x revenue growth
compared to those following a haphazard approach

11. Looking ahead
Choose your
portfolio model
and investment
strategy
Govern
innovation to
grow
Mature Portfolio
Investment Strategy: Longevity
If you expect to generate 50% of revenues
or more from your legacy businesses in the
next 5 years, and that is where strongest
growth is expected…
Balanced Portfolio
Investment Strategy: Balance
If you expect to accelerate revenue
generation from growth and emerging
businesses in the next 5 years…
…get more disciplined in the way you
experiment with and scale new ideas,
especially those that rely heavily on
new technologies.
…get more disciplined in the way you
generate and test new ideas. Look
outside your organization for disruptive
ideas with the right partners.
Source: Accenture Research Analysis

12. About the research
In order to better understand how portfolio
companies approach innovation, how they
allocate innovation investments across different
businesses and how they manage those
investments, we structured our research in three
phases:
1. 20 in-depth interviews with corporate, non-
corporate and academic innovation experts
2. Phone-based survey with senior executives
from 1,090 companies above $1 billion in
annual revenues
3. Financial analysis on revenue growth for the
1,090 surveyed companies
11 industries
Automotive
Banking
Chemicals
Communications & Media
Consumer Goods & Services
Energy
Health
High Technology
Life Sciences
Software & Platforms
Utilities
Organization Level
56%
25%
8%11%
0%
10%
20%
30%
40%
50%
60%
US$1-9
Billion
US$10-29
Billion
US$30-49
Billion
US$50
Billion or
more
ANNUAL REVENUES
Australia, Brazil, Canada, China, France,
German, India, Italy, Japan, Netherlands, South
Africa, Spain, Switzerland, US, UK
15 COUNTRIES
20%
C–suite
16%
VP/Director
64%
Senior Manager
Functional Area
4%
Innovation
6%
Research and
Development
23%
Strategy
26%
Marketing
41%
Operations

13. Tell me more
www.accenture.com/portfolioinnovation
Join the conversation
@AccentureRSRCH
Why innovation needs more governance
Dr. Vedrana Savic
Managing Director, Thought Leadership
Accenture Research
vedrana.savic@accenture.com
Paul Daugherty
Chief Technology & Innovation Officer
Accenture
paul.r.daugherty@accenture.com
Kevin Millan
Senior Principal, Thought Leadership
Accenture Research
kevin.millan@accenture.com
Paul Nunes
Global Managing Director, Thought Leadership
Accenture Research
paul.f.nunes@accenture.com
Acknowledgements
The authors would like to thank Koteswara Ivaturi, Victor
Ekpu, Himanshu Patney, Dave Light and Paul Barbagallo
for their work and contributions to this report.

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and Harvard Business School—guides our
innovations and allows us to transform theories and
fresh ideas into real-world solutions for our clients.
www.accenture.com/research
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